Shortly after Jim Collins released his culture-shaping business book Good to Great, he came to realize that a large percentage of the people who read his book and embraced its ideas came not from the business sector but from the nonprofit sector.
To him, that was not a problem, because he felt that Good to Great principles applied perfectly to the social sectors, although he soon learned that one key consideration – the drivers of a business’ economic engine – had to be tweaked to focus more broadly, considering resources rather than economics. Otherwise, as he pointed out in his 2005 monograph “Good to Great and the Social Sectors,” the basic concepts hold. In fact, he has said that, while prevailing wisdom asserts that nonprofits could learn a lot from the business sector, the fact is businesses could learn a lot from nonprofits.
I believe that final thought is more relevant than ever for the financial services industry today. As Millennials and Gen Zers become the dominant generations in the marketplace, their desire to do good in the world and to associate with institutions that also do good must be a taken seriously by banks that want their business.
Pursuing NextGen customers
It’s no secret that the rising generations have the power to change the way financial institutions operate. The two largest generations in U.S. history, Millennials and GenZers not only are approaching their prime earning years, but they also stand poised to receive at least $30 trillion in a looming generational wealth transfer.
The challenge is that these up-and-comers value action far more than words and issues over institutions. As a result, the old practice of donating a few dollars to a nonprofit as a show of virtue or slapping the equivalent of a “Dolphin-Safe” sticker on your products will no longer make you a favored organization. You need to show real, authentic dedication and engage in real action.
These NextGen priorities are well-documented: Nonprofit Source has noted that roughly 84% of Millennials give to charity, compared to 74% of the nation as a whole. CNBC reported that nearly three-quarters of Millennials donated to COVID relief, and more than two-thirds of Gen Z made gifts. Cone Communications notes that 83% of Millennials say they are more loyal to firms that help them contribute to causes.
So, how do banks go beyond a nice sheen and become truly virtuous in the eyes of these young customers? I think there are three key ways: facilitate nextgen charitable giving as a core part of their services, take concrete action to support causes, and to empower their customers, vendors, and community at large to join them.
Facilitating Giving
Digital banking has put that first option within easy reach, and I’m proud of how our modern giving platform has allowed banks to democratize charitable giving by putting giving at all customers’ fingertips. With Ren’s Cash Giving Fund, customers can plan their giving, budget for it, schedule it, and execute it, all from within the bank’s app environment. And when tax time rolls around, they’ve got all their tax documents in one place and ready to go. The Cash Giving Fund also allows donors to connect with other bank customers to socialize their giving, encouraging others to join them in giving, promoting causes, and more.
Taking tangible action
Like anyone, NextGen customers certainly will appreciate it if the bank where they do business supports causes they care about. But the intel suggests that a “We support …” sign in the lobby or the occasional check presentation photo won’t win their respect. They want to see that a bank is doing work that benefits their community in a tangible way. Ren’s modern solution to giving can help in that effort, too, by more directly connecting banks to their customers and their community so they can both communicate more efficiently and also gather information about what causes matter to their customers. One northwestern bank leveraged Ren’s Public Causes feature in this way, rallying its customers and community to support a campaign to fight homelessness across their 50+ branch geographic footprint. The result? The bank raised nearly $500,000 that went to homeless shelters in the communities where customers live.
‘Build Brand’
In his “Flywheel of the Social Sectors,” Jim Collins includes as one of his four essential actions, “Build Brand.” If that brand is “built upon tangible results and emotional share of heart,” he says, people will “believe not only in your mission but in your capacity to deliver on that mission.”
That, I think, is the kind of mindset that will set banks apart in the coming years. If they can facilitate the charitable ambitions of Millennials and Gen Zers and demonstrate an authentic and tangible commitment to the community, they’ll garner that “emotional share of heart” that will win them customers … and that, ultimately, will help them move from good to great.
The benefits of a giving program are clear, but even better, banks can use charitable incentives with Ren’s Cash Giving Fund to drive business outcomes and engage with their customers in unique ways. Click here to see how Ren’s Cash Giving Fund makes it easy to send gifts or incentives to your customers.
